Answer:
money demand; leftward
Explanation:
Money demand depends upon the interest rate as well as the price level.
When the money market is been drawn with a value of the money on the [tex]\text{vertical axis}[/tex], the quantity of money demanded is increased and the price level also increases. Also the curve slopes downward. But it decreases the the money supply as well as the price level.
When the money demand shifts towards left or when the money supply shifts rightwards, the price level increases.
Top Knot, Inc. is expected to pay a $2.50 per share dividend next year. The dividends are anticipated to maintain a 5% growth rate forever. If the stock currently sells for $48 per share, what is the cost of equity
Answer:
10.21
Explanation:
Dividend= 2.50
The growth rate is 5%
The current stock price is $48
Therefore the cost of equity can be calculated as follows
= 2.50/48 +5/100
= 0.0521 + 0.05
= 0.1021×100
= 10.21
Hence the cost of equity is 10.21
The following transactions occur for the Hamilton Manufacturers. (a) Provide services to customers on account for $4,600. (b) Purchase equipment by signing a note with the bank for $10,200. (c) Pay advertising of $1,000 for the current month.
Answer:
Question wants to know how the Accounting equation is affected by these transactions.
a. Provide services to customers on account for $4,600.
Assets will increase by $4,600.
Equity will increased by $4,600
This is because, Accounts receivable will increase on account of these services being offered on account and it is an Asset account.
This transaction also brings in revenue which is an equity account so Equity will increase as well.
b. Purchase equipment by signing a note with the bank for $10,200.
Assets will increase by $10,200
Liabilities will increase by $10,200
Equipment is an asset which is why assets are increasing. This purchase was funded by a Note which is a liability so liabilities increase as well.
c. Pay advertising of $1,000 for the current month.
Assets decrease by $1,000.
Equity decrease by $1,000.
The advertising was paid for by cash so cash (asset) will reduce as a result. Advertising is an expense and expenses reduce revenue which is in equity so Equity reduces as well.
Agee Technology, Inc., issued 9% bonds, dated January 1, with a face amount of $1,840 million on July 1, 2021, at a price of $1,810 million. For bonds of similar risk and maturity, the market yield is 10%. Interest is paid semi-annually on June 30 and December 31.
Prepare the journal entry to record interest at the effective interest rate at December 31. What would be the amount(s) related to the bonds that Agee would report in its statement of cash flows for the year ended December 31, 2018, if it uses the direct method?
Answer:
Part 1
Journal entry to record interest at the effective interest rate at December 31.
Debit : Interest expense $181.45
Credit : Bond Payable $181.45
Part 2
the amount(s) related to the bonds that would be recorded in statement of cash flows
Cash flow from Operating Activities - Interest expense $181.45
Cash flow from Financing Activities - Repayment of Bond $18.55
Explanation:
The bond amortization table is the only tool that can supply us with further information about the Bond Interest, Bond Capital Repayment and Balance after Installment.
We can simply construct an amortization by entering the following data in the financial calculator,
FV = $1,840 million
PV = - $1,810 million
PMT = ($1,810 million x 9%) ÷ 2 = $81.45
I/YR = 10 %
P/YR = 2
N = 3.14
then, SHIFT Amort gives,
Bond Amortization table (extract)
Date Principle Interest Balance
December 31, 2018 $18.55 $181.45 $1.828
Teams of retired executives who help new entrepreneurs with everything from writing business plans to answering questions about everyday operations are known as
Answer:
The answer is "Score".
Explanation:
Service corps of retired executives is a United states Smaller Business Administration (SBA) non-commercial organization its objectives are to provide advice for young or less-experienced entrepreneurs. Voluntary tutors are frequently entrepreneurs, but not the economic world whatsoever. These volunteers weren't just engaging in training on starting a business, but on how to develop & record company marketing films.
The social media policy requires that colleagues: __________
a. Never post CVS Health confidential information or personal information about our patients, customers or your colleagues online.
b. Never take or post photos of any workspace or store that may contain confidential information.
c. Never take or post pictures of patients or customers without their consent.
d. All of the above
Answer:
d. All of the above
Explanation:
In the case of the social policy, it required that colleagues should never post the confidential information or personal information related to the patients, never take or post the photos that have confidental information, and never take or post the photos without their wish
So as per the given situation, the last option is correct
Romano Corporation has three operating divisions and requires a 12% return on all investments. Selected information is presented here:
Required:
Calculate the missing amounts for each division. (Do not round intermediate calculations. Round "Margin", "Turnover" and "ROI" to 2 decimal places.)
Division X Division Y Division Z
Revenues $1,006,000
Operating income $105,600 $104,900
Operating assets $419,800 $298,200
Margin % 14.00 % %
Turnover turn(s) 1.00 turn(s) 3.00 turn(s)
ROI % % %
Residual income $28,690
Answer:
DIVISION X
Revenues = $1006000
Operating income = $105600
Operating assets = $419800
Margin = (Income*100/Revenue) = $105600*100/$1006000 = 10.50%
Turnover = (Turnover/Assets) = $1006000/$419800 = 2.4 times
ROI = (income*100/assets) = 105600*100/419800 = 25.15%
Residual Income = (105600-419800*12%) = $55224
DIVISION Y
Revenues = $298200*1 = $298200
Operating income = $298200*14% = $41748
Operating assets = $298200
Margin = 14%
Turnover = 1 times
ROI = (income*100/assets) = $41748*100/$298200 = 14%
Residual Income = (41748-298200*12%) = $5964
DIVISION Z
Revenues = $635083.33 * 3 = $1905250
Operating income = $104900
Operating assets = (104900-28690)*100/12 = $635083.33
Margin = (Income*100/Revenue) = $104900*100/$1905250 = 5.51%
Turnover = 3 times
ROI = (income*100/assets = 5.51% * 3 = 16.53%
Residual Income = $28690
Wallaby Kite Company, a small Melbourne firm that sells kites on the Web, wants a master budget for the three months beginning January 1, 2012. It desires an ending minimum cash balance of $20,000 each month. Sales are forecast at an average wholesale selling price of $8 per kite. Merchandise costs average $4 per kite. All sales are on credit, payable within 30 days, but experience has shown that 60 percent of current sales are collected in the current month, 30 percent in the next month, and 10 percent in the month thereafter. Bad debts are negligible.
In January, Wallaby Kite is beginning just-in-time (JIT) deliveries from suppliers, which means that purchases will equal expected sales. On January 1, purchases will cease until inventory decreases to $24,000, after which time purchases will equal sales. Purchases during any given month are paid in full during the following month. Monthly operating expenses are as follows:
Wages and salaries....$60,000
Insurance expired...........500
Depreciation.................1,000
Miscellaneous.............10,000
$1,000/month + 10% of quarterly sales over
Rent...........................$40,000
Cash dividends of $6,000 are to be paid quarterly, beginning January 15, and are declared on the 15th of the previous month. All operating expenses are paid as incurred, except insurance, depreciation, and rent. Rent of $1,000 is paid at the beginning of each month, and the additional 10 percent of sales is paid quarterly on the 10th of the month following the end of the quarter. The next rent settlement date is January 10.
The company plans to buy some new fixtures for $12,000 cash in March.
Money can be borrowed and repaid in multiples of $2,000. Management wants to minimize borrowing and repay rapidly. Simple interest of 10 percent per annum is computed monthly but paid when the principal is repaid. Assume that borrowing occurs at the beginning, and repayments at the end, of the months in question. Compute interest to the nearest dollar.
Answer:
ask brainly lol
Explanation:
Renfro Corporation’s bonds will mature in 10 years. The bonds have a face value of $1,000 and an 8% coupon rate, paid semiannually. The price of the bonds is $1,100. What is the bond’s yield to maturity, current yield and capital gains yield?
Answer:
Renfro Corporation
The bond's yield to maturity is:
= 0.067
The bond's current yield is:
= 0.073
The bond's capital gains yield is:
= -0.006
Explanation:
a) Data and Calculations:
Maturity period of bonds = 10 years
Face value of the bonds = $1,000
Coupon rate = 8% paid semiannually
Price of the bonds = $1,100
Yield to maturity (YTM) = (C + {(FV - PV)/t})/{(FV + PV)/2}
where C = Coupon interest = $80 ($1,000 * 8%)
FV = Face value of the bonds
PV = Present value or price of the bonds
t = number of years
YTM = ($80 + {($1,000 - $1,100)/10})/{($1,000 + $1,100)/2}
= ($80 + {(-$100)/10})/{($2,100)/2}
= ($80 + $-10/$1,050
= $70/$1,050 = 0.06667
= 0.067
Current Yield = Annual interest/Price
= $80/$1,100
= 0.073
Capital gains yield = YTM - Current Yield
= 0.067 - 0.073
= -0.006
Boswal Company uses the weighted-average method in its process costing system. The Assembly Department started the month with 6,000 units in its beginning work in process inventory that were 80% complete with respect to conversion costs. An additional 52,000 units were transferred in from the prior department during the month to begin processing in the Assembly Department. There were 18,000 units in the ending work in process inventory of the Assembly Department that were 20% complete with respect to conversion costs. What were the equivalent units for conversion costs in the Assembly Department for the month
Answer:
Boswal Company
The the equivalent units for conversion costs in the Assembly Department for the month are:
= 43,600 units.
Explanation:
a) Data and Calculations:
Units Materials Conversion
Beginning work in process inventory 6,000 100% 80%
Units added during the month 52,000
Total units available for processing 58,000
Ending work in process inventory 18,000 100% 20%
Units completed and transferred out 40,000
Equivalent units of production:
Units Materials Conversion
Units completed and transferred 40,000 40,000 (100%) 40,000 (100%)
Ending work in process inventory 18,000 18,000 (100%) 3,600 (20%)
Total equivalent units of production 58,000 43,600
Price Quantity Demanded Quantity Supplied $4 10 000 Tickets 8 000 Tickets $8 8 000 Tickets 8 000 Tickets $12 6 000 Tickets 8 000 Tickets $16 4 000 Tickets 8 000 Tickets $20 2 000 Tickets 8 000 Tickets a) Draw the demand and supply curves. What is unusual about this supply curve? What might this be true? b) What are the equilibrium price and quantity of tickets?
Answer:
a) Draw the demand and supply curves. I have attached the supply and demand curves below
What is unusual about this supply curve? What might this be true? What is inusual is that the supply curve is vertical, which means that the supply for this market is perfectly inelastic. A perfectly inelastic supply occurs when supply does not respond to price, it stays at the same quantity regardless of price level and price changes.
b) What are the equilibrium price and quantity of tickets?
The equilibrium price is $8 and the equilibrium quantity is 8 000 tickets. The reason is that at the price of $8 both the quantity supplied and demanded is equal to 8 000 tickets.
name two product with an inelastic demand
Answer:
everything can be found in the picture
The balance sheet value of a firm's inventory is $60,000. Suppose that the firm purchases supplies at a cost of $3,500 and adds them to inventory. A day later, the market value of the recently purchased supplies changes to $1,000.
Assuming no other changes to inventory, and using the historical cost method, what is the final balance sheet value of inventory?
Note: Students with prior accounting experience should not apply the monthly "lower of cost or market" adjustment. This is a day-to-day fluctuation.
Answer:
$63,500
Explanation:
Calculatuon to determine the Final balance sheet value of inventory using the historical cost method
Using this formula
Final balance sheet value of inventory=Balance sheet value of firm's inventory+Supplies
Let plug in the formula
Final balance sheet value of inventory= $60,000+$3,500
Final balance sheet value of inventory= $63,500
Therefore Final balance sheet value of inventory is $63,500
An employee attends work while she should be hospitalized due to the fear of losing her job. Although the situation only affects one employee, it may result in a serious health emergency, fulfilling what facet of moral intensity
Answer:
Magnitude of consequences
Explanation:
The entire quantity of harm (gain) that occurs from the planned conduct is referred to as the scale of outcomes, and moral intensity rises as the level of suffering rises.
The amount of emotion a man feels for the implications of a moral choice is referred to as moral intensity. When a person's moral intensity is strong, his or her morality awareness and judgement are usually enhanced, leading to judgments not to participate in immoral action.
Big Blue University has a fiscal year that ends on June 30. The 2019 summer session of the university runs from June 7 through July 27. Total tuition paid by students for the summer session amounted to $111,000. Required: a. How much revenue should be reflected in the fiscal year ended June 30, 2019
Answer:
The amount of revenue that should be reflected in the fiscal year ended June 30, 2019 is $52,235.29.
Explanation:
Number of days from June 7 to June 30 = 30 - 6 = 24 days
Number of days from July 1 to July 27 = 27 days
Total number of days for the summer session = Number of days from June 7 to June 30 + Number of days from July 1 to July 27 = 24 + 27 = 51
Total tuition paid for the summer session = $111,000
Amount to be reflected in the fiscal year ended June 30 = (Number of days from June 7 to June 30 / Total number of days for the summer session) * Total tuition paid for the summer session = (24 / 51) * $111,000 = $52,235.29
Therefore, the amount of revenue that should be reflected in the fiscal year ended June 30, 2019 is $52,235.29.
You work for a marketing firm that has just landed a contract with Run-of-the-Mills to help them promote three of their products: guppy gummies, frizzles, and cannies. All of these products have been on the market for some time, but, to entice better sales, Run-of-the-Mills wants to try a new advertisement that will market two of the products that consumers will likely consume together. As a former economics student, you know that complements are typically consumed together while substitutes can take the place of other goods.
Run-of-the-Mills provides your marketing firm with the following data: When the price of guppy gummies decreases by 20%, the quantity of frizzles sold decreases by 22% and the quantity of cannies sold increases by 7%. Your job is to use the cross-price elasticity between guppy gummies and the other goods to determine which goods your marketing firm should advertise together.
Complete the first column of the following table by computing the cross-price elasticity between guppy gummies and raskels, and then between guppy gummies and mookies. In the second column, determine if guppy gummies are a complement to or a substitute for each of the goods listed. Finally, complete the final column by indicating which good you should recommend marketing with guppy gummies.
Relative to Guppy Gummies
Cross-Price Elasticity Complement or Substitute Recommend Marketing
of Demand with Guppy Gummies
Raskels
Mookies
Answer:
Cost price elasticity of frizzles is 1.1.
Cost price elasticity of cannies is -0.35.
Hence cannies are complementing good for guppy gummies, the firm should sell the cannies with the guppy gummies.
Explanation:
Cross price elasticity of frizzles:-
Cost price elasticity = Percentage change in the quantity of frizzles /
Percentage change in the price of guppy gummies.
[tex]= \frac{-22}{-20} \\\\=1.1[/tex]
Cost price elasticity of frizzles is 1.1. Since the cost price elasticity of demand for frizzles is positive, it is a substitute good for guppy gummies.
Cross price elasticity of cannies:-
Cost price elasticity = Percentage change in the quantity of cannies /
Percentage change in the price of guppy gummies.
[tex]= \frac{7}{-20} \\\\=-0.35[/tex]
Cost price elasticity of cannies is -0.35. Since the cost price elasticity of demand for frizzles is negative, it is a complement good for guppy gummies.
Hence cannies are complementing good for guppy gummies, the firm should sell the cannies with the guppy gummies.
The process of initially recording business transactions in a journal is:
A. sliding.
B. posting
c. kiting
D. journalizing.
Answer:
Journalizing
Explanation:
Q2. With the help of book please elaborate What is the difference between a corporate strategy and a competitive strategy? Give three examples of each. (Words limit up to 150)
Answer and Explanation:
Competitive and corporate strategy are very important for the success and good management of a business. Competitive strategy is one that allows a company to promote elements capable of making it different from its competitors. Examples of competitive strategy are offering lower prices, higher quality products and negotiation between customers.
Corporate strategy, on the other hand, is one that allows the company to generate elements that will increase its profit and strengthen its capacity to be more competitive. Examples of this type of strategy are the acquisition of subsidiary companies, the merger of competing companies and the restructuring of the company.
Your company has decided to give employees yearly mental health days, in addition to the sick leave and vacation days that already exist. The company sends out an e-mail to employees explaining the new benefit and urges them to take care of themselves and to understand the importance of good mental health. The leaders of this company probably think of leadership as which of the following?
a. relationship
b. skill
c. influence
d. process
Answer:
A relationship because he/she is reaching out personaly
34. A written review request to the insurance carrier is the only way to
resolve incorrectly processed claims.
Answer:
False. That is one of many.
Explanation:
False. That is one of many.
Alpha Enterprises currently operates 8 warehouses and holds a total inventory of 3,600 units. They want to reduce their inventory to 1,800 units. They should reduce the number of warehouses to:
Answer:
4 warehouses
Explanation:
Total warehouse = 8
Total inventory = 3,600 units
Units per warehouse = Total inventory /Total warehouse
Units per warehouse = 3,600 / 8
Units per warehouse = 450
Now, Alpha Enterprises wants to reduce their inventory to 1,800 units, the number of warehouse should then be:
= 1,800 units / 450 units
= 4 warehouses.
The local gas station agreed to pay its workers $7 an hour in 2018 and $10 an hour in 2019. The CPI was 252 in 2018 and 257 in 2019. Calculate the real wage rate in each year. Did these workers really get a pay raise between 2018 and 2019?
Answer:
Real wage rate can be calculated by:
= Nominal wage rate /CPI * 100
2018 real wage rate:
= 7 / 252 * 100
= $2.78
2019 real wage rate:
= 10 / 257 * 100
= $3.89
Did these workers really get a pay raise between 2018 and 2019?
YES THEY DID:
= 2019 real wage - 2018 wage rate
= 3.89 - 2.78
= $1.11
Telecommunications, Inc. is considering producing a new hands-free device that will offer several voice-activated features. After much market research, it has determined that the appropriate target price for the new product is $120. To achieve its normal minimum profit margin of 25%, Electronics must be able to produce the product at a maximum total cost of:
Answer:
Target total unitary cost= $90
Explanation:
Giving the following information:
Target selling price= $120
Minimum profit= 25%
To calculate the target total unitary cost, we need to use the following formula:
Target total unitary cost= seeling price*(1 - minimum profit)
Target total unitary cost= 120*0.75
Target total unitary cost= $90
The Quorum Company has a prospective 6-year project that requires initial fixed assets costing $962,000, annual fixed costs of $403,400, variable costs per unit of $123.60, a sales price per unit of $249, a discount rate of 14 percent, and a tax rate of 21 percent. What is the present value break-even point in units per year
Answer:
5375
Explanation:
Given that:
Initial Fixed assets costing = $962000
Annual fixed costs = $403400
Variable cost per unit = $123.60
Sales price per unit = $249.00
Discount rate = 14%
Tax rate = 21%
The contribution per unit = Sales price - Variable cost
= $(249.00 - 123.60)
= $125.40
The present value break-even point(BEP) is the region of sales level where the net present value (NPV) equals zero.
Assuming that the sales level = p
i.e.
NPV = PV(of inflows - of outflows)
Inflows = (p * contribution per unit - annual fixed cost)( 1- tax rate) + depreciation * tax rate
= (p * 125.4 - 403400) ( 1 - 0.21) + depreciation * tax rate
where;
depreciation = initial fixed assest cost/ lifetime of the project
= (125.4p - 403400)*0.79 + (962000/6)*0.21
= (125.4p - 403400)*0.79 + (160333.33)*0.21
= (125.4p - 403400)*0.79 + 33670
Now, the PV of the inflows =PV factor(6 years, 14%) * inflows
[tex]= inflows * \dfrac{( 1-(1.14)^{-6})}{0.14}[/tex]
[tex]= inflows * 3.8887[/tex]
Replacing the value for inflows, we have:
[tex]=((125.4p - 403400)*0.79 + 33670)* 3.8887[/tex]
The PV of the outflows = Initial Fixed asset cost = $962000
∴
Equating both together using:
PV(of inflows - of outflows) = 0
((125.4p - 403400)*0.79 + 33670)* 3.8887 - 962000 = 0
((125.4p - 403400)*0.79 + 33670)* 3.8887 = 962000
(99.066p - 318686 + 33670) * 3.8887 = 962000
(99.066p - 285016) * 3.8887 = 962000
385.24p - 1108341.72 = 962000
385.24p= 962000 + 1108341.72
385.24p= 2070341.72
p = 2070341.72 / 385.24
p ≅ 5375
radar plumbers do plumbing for household.Their service for the year bought in an income of R86000 .They paid out R36 200 for material ,R12400 for water and electricity,R3 800 for telephone and R18 900 for other expenses.. calculate whether the business make profit or loss
Answer:
the business is making a profit of R14700
Explanation:
A business earns a profit if total cost is less than revenue and a business earns a loss of total cost exceeds revenue
total cost = R36 200 + ,R12400 + ,R3 800 + R18 900 = 71,300
total revenue = R86000
revenue exceeds cost, so a profit is being made
profit = R86000 - 71,300 = R14,700
Assess the implications for Alaska of specialising in seafood
Answer:
ring db socialistukal all am cm all am so all all cm all si di cmm cm iam
Magna Lighting Inc. produces and sells lighting fixtures. An entry light has a total cost of $125 per unit, of which $80 is product cost and $45 is selling and administrative expenses. In addition, the total cost of $125 is made up of $90 variable cost and $35 fixed cost. The desired profit is $55 per unit. Determine the markup percentage on product cost.
Answer:
The correct solution is "125%".
Explanation:
Given:
Desired profit,
= $55
Selling and administrative expenses,
= $45
Product cost,
= $80
Now,
The markup percentage will be:
= [tex]\frac{Desired \ profit+Selling \ and \ administrative \ expenses}{Product \ cost}\times 100[/tex]
By putting the values, we get
= [tex]\frac{55+45}{80}\times 100[/tex]
= [tex]\frac{100}{80}\times 100[/tex]
= [tex]125[/tex] (%)
125% is the markup percentage on product cost.
MarkupIt is important to remember that markup is a term used to refer to the difference between the selling price of a product and cost.
SolutionUsing the formula
Desired profit + Selling and administrative expenses/product cost X 100
Desired profit = $55Selling and administrative expenses = $45product cost = $8055+45/80 = 1.25
1.25* 100= 125
= 125%
You can learn more about markup percentage here https://brainly.com/question/19104371
Curley Publishers Inc. projected sales of 51,000 diaries for 2016. The estimated January 1, 2016, inventory is 3,600 units, and the desired December 31, 2016, inventory is 5,000 units. What is the budgeted production (in units) for 2016
Answer:
47,900
Explanation:
The projected sales for curley publishers is 51,000
The beginning inventory is 3,600
The ending inventory is 5,000
The budgeted projection units in 2016 can be calculated as follows
= 51,000+5000
= 51,500-3600
= 47,900
Hence budgeted projection units is 47,900
Troy Engines, Ltd., manufactures a variety of engines for use in heavy equipment. The company has always produced all of the necessary parts for its engines, including all of the carburetors. An outside supplier has offered to sell one type of carburetor to Troy Engines, Ltd., for a cost of $34 per unit. To evaluate this offer, Troy Engines, Ltd., has gathered the following information relating to its own cost of producing the carburetor internally:
Per Unit 21,000 Units
Per Year
Direct materials $ 14 $ 294,000
Direct labor 12 252,000
Variable manufacturing overhead 2 42,000
Fixed manufacturing overhead, traceable 9 * 189,000
Fixed manufacturing overhead, allocated 12 252,000
Total cost $ 49 $ 1,029,000
*One-third supervisory salaries; two-thirds depreciation of special equipment (no resale value).
1. Assuming the company has no alternative use for the facilities that are now being used to produce the carburetors, what would be the financial advantage (disadvantage) of buying 21,000 carburetors from the outside supplier?
Financial (disadvantage) ..................
2. Suppose that if the carburetors were purchased, Troy Engines, Ltd., could use the freed capacity to launch a new product. The segment margin of the new product would be $210,000 per year. Given this new assumption, what would be financial advantage (disadvantage) of buying 21,000 carburetors from the outside supplier?
Financial advantage ...................
Answer:
1. Financial disadvantage ($63,000)
2. Financial advantage $147,000
Explanation:
1. Calculation to determine what would be the financial advantage (disadvantage)
Per Unit
Differential
Costs 21,000 Units
Make Buy Make Buy
Cost of purchasing
$0 $34 $0 $714,000
($34*21,000 Units=$714,000)
Direct materials
$14 $294,000 $0 $0
Direct labor
$12 $0 $252,000 $0
Variable manufacturing overhead
$2 $0 $42,000 $0
Fixed manufacturing overhead, traceable1
$3 $0 $63,000 $0
($9 per unit × 1/3=$3)
Fixed manufacturing overhead, common
$0 $0 $0 $0
Total costs $31 $34 $651,000 $714,000
Financial (disadvantage) of buying the carburetors $ (3) $ (63,000)
($31-$34=$3)
($651,000-$714,000=-$63,000)
Based on the above information the company should REJECT the offer and they should CONTINUE TO PRODUCE the carburetors internally.
Therefore the FINANCIAL DISADVANTAGE of buying 21,000 carburetors from the outside supplier is ($63,000)
2. Calculation to determine the financial advantage (disadvantage)
Make Buy
Cost of purchasing $0 $714,000
($34*21,000 Units=$714,000)
Cost of making $651,000 $0
($294,000+$252,000+$42,000+$63,000)
Opportunity cost—segment margin foregone on a potential new product line $210,000 $0
Total cost $861,000 $714,000
Financial advantage of buying the carburetors $147,000
($861,000-$714,000=$147,000)
Based on the above calculation, the company should ACCEPT the offer and thereby PURCHASE the carburetors from the outside supplier.
Therefore what would be FINANCIAL ADVANTAGE of buying 21,000 carburetors from the outside supplier is $147,000
During 2021, its first year of operations, Pave Construction provides services on account of $160,000. By the end of 2021, cash collections on these accounts total $110,000. Pave estimates that 25% of the uncollected accounts will be uncollectible. In 2022, the company writes off uncollectible accounts of $10,000. Required:
Answer:
Uncollectible amounts $12,000 debit
_____ Allowance for uncollectible amounts $12,000 credit
(Being the record of uncollectible)
Allowance for uncollectible amounts $10,000 debit
______ Accounts receivables $100,000 credit
(To record write off 2021)
Balance of the Allowance accounts:
$12,500 - 10,000 = 2,500
Allowance uncollectible amounts $15,000 debit
_____ Accounts receivables $15,000 credit
(To record write off 2022)
Explanation:
•The concluding part of the above question is record the adjusting entry for uncollectible accounts on December 31 2021
• Record write off of accounts receivables in 2022
Sales $160,000
Collection $110,000
AR $50,000
The above is multiplied by 25% unexpected uncontrollable amount : $12,500
The Allowance method will not recognize the additional uncollectible amount expense when doing a writer off. It will only do it when the company does the adjusting entry considering their rates and ageing of their accounts
On October 1, 20Y6, Jay Crowley established Affordable Realty, which completed the following transactions during the month:
Oct. 1 Jay Crowley transferred cash from a personal bank account to an account to be used for the business in exchange for common stock, $30,600.
Oct. 2 Paid rent on office and equipment for the month, $2,750.
Oct. 3 Purchased supplies on account, $2,350.
Oct. 4 Paid creditor on account, $890.
Oct. 5 Earned sales commissions, receiving cash, $15,800.
Oct. 6 Paid automobile expenses (including rental charge) for month, $1,600, and miscellaneous expenses, $680.
Oct. 7 Paid office salaries, $2,000.
Oct. 8 Determined that the cost of supplies used was $1,150.
Oct. 9 Paid dividends, $2,800.
Required –
1. Journalize entries for transactions Oct. 1 through 9. Refer to the Chart of Accounts for exact wording of account titles.
2. Post the journal entries to the T accounts, selecting the appropriate date to the left of each amount to identify the transactions. Determine the account balances, after all posting is complete. Accounts containing only a single entry do not need a balance.
3. Construct an unadjusted trial balance as of October 31, 20Y6.
4. Determine the following:
a. Amount of total revenue recorded in the ledger.
b. Amount of total expenses recorded in the ledger.
c. Amount of net income for October.
5. Determine the increase or decrease in retained earnings for October.
Answer:
Affordable Realty
1. Journal Entries:
Oct. 1 Debit Cash $30,600
Credit Common Stock $30,600
To record the capital contribution of Jay Crowley.
Oct. 2 Debit Rent Expense $2,750
Credit Cash $2,750
To record the payment for monthly rent.
Oct. 3 Debit Supplies $2,350
Credit Accounts Payable $2,350
To record the purchase of supplies on account.
Oct. 4 Debit Accounts Payable $890
Credit Cash $890
To record the payment on account.
Oct. 5 Debit Cash $15,800
Credit Service Revenue $15,800
To record the receipt of sales commission for cash.
Oct. 6 Debit Automobile expenses $1,600
Debit Miscellaneous expenses, $680
Credit Cash $2,280
To record the payment of expenses.
Oct. 7 Debit Office salaries expenses $2,000
Credit Cash $2,000
To record the payment of office salaries for the month.
Oct. 8 Debit Supplies Expense $1,150
Credit Supplies $1,150
To record the supplies expenses for the month.
Oct. 9 Debit Cash Dividends, $2,800
Credit Cash $2,800
To record the payment of dividends.
2. T-accounts:
Cash
Date Account Titles Debit Credit
Oct. 1 Common Stock $30,600
Oct. 2 Rent Expense $2,750
Oct. 4 Accounts Payable 890
Oct. 5 Service Revenue 15,800
Oct. 6 Automobile expenses 1,600
Oct. 6 Miscellaneous expenses 680
Oct. 7 Office salaries expense 2,000
Oct. 9 Cash Dividends 2,800
Oct. 31 Balance $35,680
Common Stock
Date Account Titles Debit Credit
Oct. 1 Cash $30,600
Supplies
Date Account Titles Debit Credit
Oct. 3 Accounts Payable $2,350
Oct. 8 Supplies Expense $1,150
Oct. 31 Balance $1,200
Accounts Payable
Date Account Titles Debit Credit
Oct. 3 Supplies $2,350
Oct. 4 Cash $890
Oct. 31 Balance $1,460
Service Revenue
Date Account Titles Debit Credit
Oct. 5 Cash $15,800
Rent Expense
Date Account Titles Debit Credit
Oct. 2 Cash $2,750
Supplies Expense
Date Account Titles Debit Credit
Oct. 8 Supplies $1,150
Automobile Expense
Date Account Titles Debit Credit
Oct. 6 Cash $1,600
Miscellaneous Expense
Date Account Titles Debit Credit
Oct. 6 Cash $680
Office Salaries Expense
Date Account Titles Debit Credit
Oct. 7 Cash $2,000
Cash Dividends
Date Account Titles Debit Credit
Oct. 9 Cash $2,800
3. Unadjusted Trial Balance as of October 31, 20Y6
Account Titles Debit Credit
Cash $35,680
Supplies 1,200
Common stock $30,600
Accounts payable 1,460
Service revenue 15,800
Rent expense 2,750
Supplies expense 1,150
Automobile expense 1,600
Miscellaneous expense 680
Office salaries expense 2,000
Cash dividends 2,800
Total $47,860 $47,860
4. a. Amount of total revenue recorded in the ledger = $15,800
b. Amount of total expenses = $10,980
c. Amount of net income for October = $4,820 ($15,800 - $10,980)
5. Increase in retained earnings for October = $2,020 ($4,820 - $2,800)
Explanation:
a) Data and Analysis:
Oct. 1 Cash $30,600 Common Stock $30,600
Oct. 2 Rent Expense $2,750 Cash $2,750
Oct. 3 Supplies $2,350 Accounts Payable $2,350
Oct. 4 Accounts Payable $890 Cash $890
Oct. 5 Cash $15,800 Service Revenue $15,800
Oct. 6 Automobile expenses $1,600 Miscellaneous expenses, $680 Cash $2,280
Oct. 7 Office salaries expense, $2,000 Cash $2,000
Oct. 8 Supplies Expense $1,150 Supplies $1,150
Oct. 9 Cash Dividends, $2,800 Cash $2,800